Intro	  to	  SR&ED	  Boastcapital.com	  |	  @Boastcapital	  	  |	  	  Boastcapital.com/blog	  	  
Agenda	  •  About	  Boast	  Capital	  •  What	  is	  SR&ED?	  •  Why	  is	  it	  Important	  to	  You?	  •  Current	  SR&E...
About	  Boast	  Capital	  •  R&D	  Cost	  Recovery:	  	  Calgary,	  Vancouver,	  Silicon	  Valley	  	  •  Community	  focu...
BoastCapital.com	  |	  @BoastCapital	  |	  BoastCapital.com/blog	   4	  Recent	  RecogniJon	  Calgary	  Herald’s	  April	 ...
BoastCapital.com	  |	  @BoastCapital	  |	  BoastCapital.com/blog	   5	  About	  Boast	  Capital	  •  We	  work	  on	  a	  ...
BoastCapital.com	  |	  @BoastCapital	  |	  BoastCapital.com/blog	   6	  What	  is	  SR&ED?	  •  ScienJfic	  Research	  and	...
BoastCapital.com	  |	  @BoastCapital	  |	  BoastCapital.com/blog	   7	  Why	  is	  it	  Important	  to	  You?	  	  •  Star...
SR&ED	  Stats	  •  $3.6B	  in	  funding	  paid	  annually	  – $1.8B	  paid	  in	  2006,	  100%	  increase	  •  28K+	  clai...
BoastCapital.com	  |	  @BoastCapital	  |	  BoastCapital.com/blog	  Refundable	  Credits	  	  •  Fall	  within	  the	  Smal...
SR&ED	  Program	  Changes	  •  Eliminate	  capital	  expenditures	  – For	  expenditures	  incurred	  aser	  Jan	  1,	  20...
BoastCapital.com	  |	  @BoastCapital	  |	  BoastCapital.com/blog	   11	  Qualifying	  Expenditures	  •  Salaries	  	  	  •...
BoastCapital.com	  |	  @BoastCapital	  |	  BoastCapital.com/blog	   12	  Qualifying	  Expenditures	  •  Capital	  expendit...
SR&ED	  Technical	  Overview	  •  ScienJfic	  Research	  (SR)	  – Usually	  carried	  out	  in	  UniversiJes/Laboratories	 ...
Eligibility	  Criteria	  •  Technological	  Advancement	  The	  technology	  being	  sought	  does	  not	  exist	  within	...
How	  to	  IdenJfy	  SR&ED	  -­‐	  5	  QuesJons	  1.  Have	  you	  changed	  a	  process	  to	  reduce	  costs	  or	  to	 ...
BoastCapital.com	  |	  @BoastCapital	  |	  BoastCapital.com/blog	   16	  How	  to	  IdenJfy	  SR&ED	  -­‐	  5	  QuesJons	 ...
BoastCapital.com	  |	  @BoastCapital	  |	  BoastCapital.com/blog	   17	  Project	  Examples	  •  IntegraJng	  disparate	  ...
BoastCapital.com	  |	  @BoastCapital	  |	  BoastCapital.com/blog	   18	  Project	  Examples	  •  Developing	  a	  sosware	...
BoastCapital.com	  |	  @BoastCapital	  |	  BoastCapital.com/blog	   19	  Tracking	  SR&ED	  Work	  •  Contemporaneous:	  g...
BoastCapital.com	  |	  @BoastCapital	  |	  BoastCapital.com/blog	   20	  DocumentaJon	  -­‐	  Sosware	  •  Timesheets	  	 ...
BoastCapital.com	  |	  @BoastCapital	  |	  BoastCapital.com/blog	   21	  DocumentaJon	  -­‐	  Other	  •  Timesheets	  	  •...
How	  to	  Claim	  SR&ED	  •  File	  a	  separate	  schedule	  and	  report	  with	  your	  corporate	  tax	  return	  – T...
BoastCapital.com	  |	  @BoastCapital	  |	  BoastCapital.com/blog	   23	  Claim	  Turnaround	  Time	  From	  receipt	  of	 ...
Contact	  InformaJon	  Jeff	  ChrisJe	  Calgary,	  AB	  403-­‐589-­‐2809	  jchrisJe@boastcapital.com	  	  	  BoastCapital.c...
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Intro to Scientific Research and Experimental Development (SR&ED/ R&D) Tax Credits

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Introduced in the 1980s, SR&ED (Scientific Research and Experimental Development) is a federal tax incentive program, administered by the Canada Revenue Agency (CRA), to encourage businesses of all sizes, particularly small to medium and startup businesses, to develop new or improve existing products, processes, principles, methodologies, or materials.

Eligible businesses can recover up to 68% of their expenditures including wages, materials, machinery, equipment, travel and training expenses, property taxes, utility expenses, and overhead.

This presentation will walk you through the SRED program, eligibility critieria and how you can make a successful claim. For more information, visit: http://boastcapital.com.

Published in: Business, Economy & Finance
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  • Tax credit or CASH Does not fund Social research, style chg, exploration
  • Tax credit or CASH Does not fund Social research, style chg, exploration
  • Tax credit or CASH Does not fund Social research, style chg, exploration
  • Intro to Scientific Research and Experimental Development (SR&ED/ R&D) Tax Credits

    1. 1. Intro  to  SR&ED  Boastcapital.com  |  @Boastcapital    |    Boastcapital.com/blog    
    2. 2. Agenda  •  About  Boast  Capital  •  What  is  SR&ED?  •  Why  is  it  Important  to  You?  •  Current  SR&ED  ITC  Rates  •  Qualifying  Expenditures  •  How  to  IdenJfy  SR&ED  -­‐  5  QuesJons  •  Project  Examples  •  How  to  Claim?    BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   2  
    3. 3. About  Boast  Capital  •  R&D  Cost  Recovery:    Calgary,  Vancouver,  Silicon  Valley    •  Community  focused:  Startup  Calgary,  Canadian  Cloud  Council,  Calgary  Council  of  Advanced  Technology,  Calgary  Herald,  Techvibes,  Oil  &  Gas  Magazine    •  Joint  iniJaJve  with  Plug  and  Play  in  Silicon  Valley  to  invest  in  Canadian  startups  BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   3  
    4. 4. BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   4  Recent  RecogniJon  Calgary  Herald’s  April  24,  2013  list  of  “Companies  SupporJng  Tech  Companies”  
    5. 5. BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   5  About  Boast  Capital  •  We  work  on  a  conJngency  basis  and  charge  a  percentage  of  the  tax  credits  (ITCs)  we  recover  for  you  – No  invoice  from  us  unJl  you  are  guaranteed  to  receive  the  tax  credits  from  the  government  – We  have  just  as  much  “skin  in  the  game”    •  We  help  idenJfy  and  scope  eligible  work  and  expenditures  
    6. 6. BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   6  What  is  SR&ED?  •  ScienJfic  Research  and  Experimental  Development  tax  credits.      •  Federal  Tax  IncenJve  program  for  InnovaJon  administered  by  the  Canada  Revenue  Agency    (CRA)  –  Cost  Recovery    •  Intended  to  encourage  businesses  of  all  sizes  to  conduct  applied  research  and  development  (R&D)  that  will  lead  to  new,  improved,  or    technologically  advanced  products,  processes,  principles,  methodologies,  or  materials.  
    7. 7. BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   7  Why  is  it  Important  to  You?    •  Startup:  criJcal  way  to  extend  your  runway  and  maximize  money  already  invested  into  your  company    •  Growth:  provide  financial  support  to  help  fuel  growth    •  Established:  allow  for  a  beier  return  by  increasing  cash  reserves  or  reinvest  in  R&D  of  new  product  that  will  keep  you  on  the  cujng  edge  
    8. 8. SR&ED  Stats  •  $3.6B  in  funding  paid  annually  – $1.8B  paid  in  2006,  100%  increase  •  28K+  claimants  annually  naJonwide  – 11K  claimants  in  2006,  155%  increase  •  80%  of  claims  by  small  and  medium  size    businesses  BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   8  
    9. 9. BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog  Refundable  Credits    •  Fall  within  the  Small  Business  Limit  •  Canadian  Controlled  Private  CorporaJon  (CCPC)  •  ~66%  back  on  labor  •  ~41%  on  sub-­‐contractors  •  ~41%  on  materials  consumed/transformed  and  capital  expenditures  (2013  last  year)  Non-­‐Refundable  Credits    •  Fall  outside  of  the  Small  Business  Limit  •  Non-­‐CCPC  •  Publically  Traded  •  ~44%  back  on  salaried  labor  •  ~22%  on  sub-­‐contractors  •  ~28%  on  materials  consumed/transformed  and  capital  expenditures  (2013  last  year)  Current  SR&ED  ITC  Rates  9  
    10. 10. SR&ED  Program  Changes  •  Eliminate  capital  expenditures  – For  expenditures  incurred  aser  Jan  1,  2014    •  Lower  the  overhead  proxy  amount  – Currently  60%  à  55%  by  Jan  1,  2014    •  Lower  %  of  subcontractor  payments    – Currently  100%  à  80%  by  Jan  1,  2013  •  Lower  federal  SR&ED  rate  for  large  corporaJons  – Currently  20%  à  15%  by  Jan  1,  2014  BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   10  
    11. 11. BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   11  Qualifying  Expenditures  •  Salaries      •  Cost  of  materials  consumed  or  transformed    •  Contract  payments  –  subcontractor  expenses    •  Lease  costs      
    12. 12. BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   12  Qualifying  Expenditures  •  Capital  expenditures  –  machinery,  computer  hardware,  etc.  (ends  aser  2013)  •  Overhead  expenditures  –  tradiJonal  or  proxy  method    *work  must  be  carried  out  in  Canada  (10%  allowed  outside  of  Canada/performed  by  Canadian  tax  payers)  
    13. 13. SR&ED  Technical  Overview  •  ScienJfic  Research  (SR)  – Usually  carried  out  in  UniversiJes/Laboratories    •  Experimental  Development  (ED)  – The  majority  of  the  claims  – CRA:  “Work  performed  for  the  purpose  of  creaJng  new,  or  improving  exisJng,  materials,  devices,  products,  or  processes”  – Can  occur  in  various  industries  (low  and  high  tech)  BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   13  
    14. 14. Eligibility  Criteria  •  Technological  Advancement  The  technology  being  sought  does  not  exist  within  the  company  or  public  domain      •  Technological  UncertainJes/Obstacles  A  qualified  person  could  not  predict  if,  or  how,  a  project  could  succeed  on  the  basis  of  previous  knowledge  (i.e.  exisJng  proven  methods)    •  Technical  Content  Qualified  personnel  working  in  a  systemaJc  manner  with  documentaJon  BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   14  
    15. 15. How  to  IdenJfy  SR&ED  -­‐  5  QuesJons  1.  Have  you  changed  a  process  to  reduce  costs  or  to  improve  manufacturing  capabiliJes?      2.  Have  you  created  a  new  product,  made  improvements  or  added  new  features  to  an  exisJng  product.  Have  you  built  a  prototype  or  proof  of  concept  for  a  product  idea?    3.  Have  you  designed  or  developed  new  sosware  or  systems  or  modified  an  exisJng  technology?  BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   15  
    16. 16. BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   16  How  to  IdenJfy  SR&ED  -­‐  5  QuesJons  4.  Have  you  incurred  costs  related  to  a  process,  project  or  prototype  that  is  incomplete  because  of  unresolved  technical  problems?  5.  Are  you  involved  in  engineering,  design,  data  collecJon,  tesJng  or  other  developmental  work?  
    17. 17. BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   17  Project  Examples  •  IntegraJng  disparate  sosware  systems  that  weren’t  meant  to  communicate  with  each  other    •  Developing  a  reusable  sosware  plaworm  using  a  non  standard  MVC    •  Working  to  increase  manufacturing  speed  while  keeping  quality  consistent  •  Retrofijng  an  exisJng  piece  of  equipment  to  use  for  a  different  funcJon  than  its  originally  intended  funcJon  
    18. 18. BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   18  Project  Examples  •  Developing  a  sosware  system  that  needs  to  be  backward  compaJble  with  an  old  legacy  system  (context  of  your  company)  •  Overcoming  hardware  limitaJons  in  order  to  achieve  an  aggressive  performance  target  or  light  footprint  •  Applying  technologies  in  ways  they  weren’t  intended/designed  to  be  applied  
    19. 19. BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   19  Tracking  SR&ED  Work  •  Contemporaneous:  generated  at  the  Jme  the  SR&ED  work  is  done  •  Dated:  to  prove  that  the  work  occurred  in  the  fiscal  year  •  Highlight  technological  issues/challenges:  support  the  technical  reports  that  will  be  submiied  with  the  claim  
    20. 20. BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   20  DocumentaJon  -­‐  Sosware  •  Timesheets    •  Document  Technical  challenges  -­‐  maintain  records  on  technical  challenges  faced  during  development    •  Version  control  for  all  technical  documents    •  Sosware  prototypes    •  Test  Documents    •  Developer  notebooks    •  Emails  
    21. 21. BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   21  DocumentaJon  -­‐  Other  •  Timesheets    •  Technical  challenges    •  Use  version  control  for  all  technical  documents    •  Product  prototypes    •  Scrap  material    •  Test  Documents    •  Engineer  notebooks    •  MeeJng  minutes    
    22. 22. How  to  Claim  SR&ED  •  File  a  separate  schedule  and  report  with  your  corporate  tax  return  – This  includes  technical  and  financial  components    •  SR&ED  is  a  ITC  (Investment  Tax  Credit)  •  Can  claim  up  to  18  months  past  year  end  BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   22  
    23. 23. BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   23  Claim  Turnaround  Time  From  receipt  of  a  complete  claim:    •  Refundable  claim  –  120  days    •  Non-­‐Refundable  –  365  days  •  Amended  claim  -­‐  240  calendar  days  
    24. 24. Contact  InformaJon  Jeff  ChrisJe  Calgary,  AB  403-­‐589-­‐2809  jchrisJe@boastcapital.com      BoastCapital.com  |  @BoastCapital  |  BoastCapital.com/blog   24  James  Suk  Vancouver,  BC  604-­‐779-­‐7770  jsuk@boastcapital.com      FREE  SR&ED  ASSESSMENT  boastcapital.com/request-­‐an-­‐assessment      

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